Key Insights

• Significant control over Wuxi New Hongtai Electrical TechnologyLtd by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 4 shareholders own 51% of the company
• Insider ownership in Wuxi New Hongtai Electrical TechnologyLtd is 31%

Every investor in Wuxi New Hongtai Electrical Technology Co.,Ltd (SHSE:603016) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 39% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Individual investors gained the most after market cap touched CN¥3.4b last week, while insiders who own 31% also benefitted.

In the chart below, we zoom in on the different ownership groups of Wuxi New Hongtai Electrical TechnologyLtd.

Check out our latest analysis for Wuxi New Hongtai Electrical TechnologyLtd

What Does The Institutional Ownership Tell Us About Wuxi New Hongtai Electrical TechnologyLtd?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Institutions have a very small stake in Wuxi New Hongtai Electrical TechnologyLtd. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

Wuxi New Hongtai Electrical TechnologyLtd is not owned by hedge funds. With a 18% stake, CEO Min Hai Zhao is the largest shareholder. For context, the second largest shareholder holds about 16% of the shares outstanding, followed by an ownership of 12% by the third-largest shareholder.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Wuxi New Hongtai Electrical TechnologyLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own a reasonable proportion of Wuxi New Hongtai Electrical Technology Co.,Ltd. It has a market capitalization of just CN¥3.4b, and insiders have CN¥1.1b worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 39% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Wuxi New Hongtai Electrical TechnologyLtd. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Equity Ownership

With an ownership of 16%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

We can see that Private Companies own 12%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Wuxi New Hongtai Electrical TechnologyLtd , and understanding them should be part of your investment process.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.